Transparency, Secrecy, and Confidentiality (and Penn State)

Amongst all the anger, hurt, and raw emotions surrounding the Jerry Sandusky and the toppling of the Penn State Leadership (including the forced removal of Joe Paterno), the “new” Administration came forward with a few promises. You would expect a few of the promises. Integrity. Honesty. And then… Transparency. 59 days later the new Coach was announced and the outrage and cries of treachery began–“So much for Transparency” OnwardState.com had as their headline.

The first two were aimed to address the issues at the heart of the charges being levied against Penn State in the scandal–that there was a cover-up, and that leaders of Penn State perjured themselves–lying in court rather than allegedly tell of the evils revealed to them. The last one? Transparency? Where did that one come from?

Calls for transparency arise when people believe some one, or some organization, is perceived to be acting in secret, and that secrecy is assumed, rightly or wrongly, to be covering improper or even illegal behavior. Often the charge of improper or illegal behavior is warranted, and often it is not. Of course, we rarely remember those instances when things ended up perfectly but as humans we are “inclined to believe the very worst about anything and everything.” (see “Free: The Future of a Radical Price,” below). Of one thing we can be sure–when an organization commits to transparency they are doing so because of a perception that they haven’t been, and they need to change. 1

In this case, Penn State faced tough critics from around the nation that felt that a cloak of secrecy pervaded the actions of the University that at best hindered investigations into Sandusky, and at worst enabled his predatory behavior. Then, as the crisis broke, the lights in Old Main were on, but the President of the University was no where to be seen. Depending on who you follow he was either hiding, or he was being held back by the Board of Trustees. Then, the Board began their activities in near silence allowing just enough light in to let us know they were “engaged.” Many questioned how the whole Board could both remain silent at this critical juncture in Penn State history, and how they could all unanimously support what seems to many to be terribly wrong decisions.2

In response, we saw a promise from Erickson, the interim President of the University, to transparency. He wrote:

Penn State is committed to transparency to the fullest extent possible, given the ongoing investigations.

I commit to providing meaningful and timely updates as frequently as needed.

So we have here a practical application of how Penn State will be “transparent” but not much of a definition of what Transparency means. We have an expectation to receive “timely” updates, and that they will be “meaningful.” But no clear definition of what even “timely” means. And updates on “what?” Finally–who determines “frequency?”

To be clear then, what is the definition of “Transparency” that Penn State is using? According to Tactical Transparency (see below) there are traditionally two definitions of transparency that are already accepted–financial transparency, and governance transparency. Publicly traded companies are already required to provide certain financial and governance information. But we are seeing companies stepping beyond that simple definition. But before we go much further on what this “new” or modern view of Transparency has become, let’s quickly review: once again, we have documentation on how the university’s governance has been anything but transparent, and those with any memory longer than 6 months will remember the significant battles Penn State has fought to keep from disclosing salaries and other financial information. In fact, just last month the Philadelphia newspaper, the Philadelphia Inquirer wrote:

The school has long had a reputation for guarding its secrets closely and zealously, and when the state attorney general announced the charges against Sandusky, she said their investigation , by a grand jury with subpoena power , had been hampered by an uncooperative atmosphere among unnamed school officials.

In addition, the NY Times wrote concerning the unique ability that Penn State has to use a cloak of secrecy:

But the public’s access to e-mails, phone records and other potentially critical evidence is restricted because Penn State has a special exemption from having to disclose a host of information that state agencies and many other state universities are forced to divulge under Pennsylvania’s Right to Know Law.

So there you have it–Penn State has been reluctant to release information and in fact has engaged in legal battles to keep from releasing even those records usually expected from government and publicly traded companies.

These first two definitions of transparency, long held, and expected. And yet, Penn State hasn’t even met those expectations. But this is not the transparency Erickson was discussing. It was clear he was talking about a new form of transparency–a transparency to the inner workings of the University.

This transparency is about the reputation of the University (or any organization). It is one that builds credibility. That instills trust. That, as a senior leader for a major retail firm recently told me, is “opening the Kimono” and letting the stakeholders see just how things are being done. I don’t think anyone can argue that the comment from the President is one driven by a need to restore the reputation of the University.

In the case of Penn State I think they set themselves up for failure from the start. First, they failed to define what they meant by transparency, creating a vacuum that is filled by whatever definitions the hearer expects. (Not unlike “Change you can believe in…” led many to vote based on a blank check). Second, their behavior didn’t change. I don’t think you can argue that you are “more transparent” when you do things essentially the same way you always have done things. [4. This is the essence of the article from StateCollege.com–that this is how things have always been done.)

The book, “Tactical Transparency,” posits that transparency designed to restore or maintain a reputation, is measured by the degree to which an organization shares with their stakeholders: their leaders, their employees, their values, their culture, the positive and negative results of their business practices, and their business strategy. The book also affirms the concept that transparency does not mean violating confidences, and giving up business secrets essential for maintaining a competitive advantage.

So what lesson can we learn from this?

1. Your stakeholders have expectations–know what those are, and try to either meet them, or carefully shape their expectations so that you remain genuine and authentic while building trust with them that those things that are not disclosed are in the best interest of the stakeholders.

2. When you declare your will be transparent (or ethical, or financially or environmentally responsible) establish up front what you mean by that. Be as clear as possible about expectations and measures of success so that you control how you will be measured.

3. Authenticity and transparency require communications. Maintain contact as often as possible, even if the message is one of “progress” without specifics. Nature abhors a vacuum, as does the news cycle. Don’t allow others to define your message.

These are just a few thoughts, and I am anxious to hear what thoughts you have on how organizations can be more transparent, while not giving away the store.

Of course, when people challenge you as not being transparent, it is a bit awkward to fall back on a defense of “this is how we do things.” That’s not change. Right? ↩

Recently, we have since heard from a former member of the Board of Trustees, Dr Ben Novak, choosing to turn the light of transparency on to the Board of Trustees revealing the way the Board does, and not, make decisions. His Reflections of a Former Trustee: How the Penn State Board of Trustees Really Works actually reads like its own little soap opera, feeding off the very suspicions that led so many to believe improper activities were occurring behind the scenes.

He writes that the Board is really run by only 5 or 6 members:

The Power Group is a self-selected group of the wealthiest and most powerful members of the Board consisting of from three to five Trustees who consider themselves the real Board. They hire and fire the president; set the salaries of the top administrators (and their retirement packages and benefits); meet or talk with the president frequently; fly around in the president’s plane; attend meetings around the country on behalf of the University; and approve of all the policies the president sets. They do this with little or no input from the majority of Trustees.

So if what he writes is true, then we see in the last sentence, that there is power usurped by a self-selected few. But that doesn’t mean they operate in secret, right? Clearly the actions of the board, the “governance” of the University sees the light of day, and we all know how decisions were reached. Actually, no.

He writes further down that the Board operates effectively under a “gag order” that has Trustees unable to voice an opinion separate from the decisions of the Board, and those decisions are made by the powerful ones. He writes:

Section (1)(f)((5), for example, requires that members are expected to: “Speak openly within the Board and publicly support decisions reached by the Board.” While the first part of this sentence — “Speak openly within the Board” — is laudable, the second part — “and support decisions reached by the Board”—is not. What the second part means is that no member of the Board may publicly speak against a decision of the Board once it is adopted. Thus, the silence of the individual members on the Board is guaranteed by the rules of the Board. ↩